Beijing's Steady Progress Toward Rebalancing

China is less dependent on exports and investment. The next step toward economic maturity? Real reform.

By

Eswar Prasad

Feb. 18, 2013 11:52 a.m. ET

While the world's attention has been focused on the political and economic dramas in Europe, Japan and the U.S., one country has been quietly chipping away at some of its own economic problems. Recent data suggest a gradual but remarkable transformation in China's growth model. It is far too early to declare victory, however, and the new leadership has its work cut out for itself.

New data suggest that it is time to revise the view that China's growth is driven largely by exports and investment. Private and government...